PRESS BRIEFING BY
SECRETARY OF TREASURY BOB RUBIN,
SECRETARY OF COMMERCE BILL DALEY,
U.S. TRADE REPRESENTATIVE CHARLENE BARSHEFSKY,
ASSISTANT TO THE PRESIDENT FOR ECONOMIC POLICY GENE SPERLING;
ASSISTANT TO THE PRESIDENT FOR INTERNATIONAL ECONOMIC POLICY
DAN TARULLO

The Briefing Room

3:20 P.M. EDT

SECRETARY RUBIN: Thank you. There's a copy of Road and
Track, All New Cars, for those who are interested. (Laughter.) I'm
not exactly sure why, but in any event, there is.

Let me start with just a word. I think the President
and the Vice President did extraordinarily well. We've had a
consistent economic strategy since the beginning of the
administration and we now have, and have had for quite some time, the
best economic condition in the industrial world. I don't think
there's any question but trade liberalization has been very important
to the economic success we've had so far, and I think it's absolutely
central in terms of our economic strength and economic health in
going forward.

Millions of Americans owe their jobs to the trade
liberalization that has taken place so far, and all Americans as
consumers have benefitted from lower prices and greater choice.

As you look around the world and you meet with finance
ministers and other public officials, one thing is absolutely clear,
and that is globalization is continuing and countries around the
world are entering into all kinds of trade liberalization agreements.
The only question -- there is no question this is going to continue;
the only question is will we be inside of it or will we be outside of
it. And if we're outside of it, in our judgment, it will be
enormously to our economic detriment.

What we must now do is work together to implement and
enact fast track negotiating authority for the President so that as
we go forward we can be part of the globalization of trade and the
trade agreements, as I said a moment ago, are developing around the
world.

And with that, I would like to introduce Secretary of
Commerce Bill Daley. And I'm going to apologize, but I have to leave
because I'm going up to the Hill in furtherance of this effort.
Thank you.

SECRETARY DALEY: I would assume we'll all be going to
the Hill very shortly for a very long time. Let me also be brief and
just express a couple comments. One, obviously, the fact that our
export growth over the last four years has created jobs. Some people
believe that we should be fearful of competition in this new global
economy. American business, American workers have proven that
instead of being frightened of competition, we should welcome it
because we are the victors over the last number of years in this very
competitive world economy.

So we have proven through our export growth and through
the competitive nature of American businesses and American workers
that we welcome this global economy, and we look forward to
furthering the lowering of barriers, as the President said today,
because it will create additional American jobs, not lose American
jobs.

So we in the Commerce Department, and speaking on behalf
of the business community, who I know many of you have heard from
outside, are very committed to this endeavor. The Cabinet is working
very hard. Dan Glickman will go to Kansas City; I'll go to
Minneapolis tomorrow; Secretary Pena will be travelling -- we will be
fanning out around the nation in addition to a tremendous number of
visits that will take place on the Hill, as we once again engage the
American people and engage the political establishment around the
world and around this country in the debate over competition and
opening of barriers and lowering them for the sole purpose of
creating American jobs and improving our economy.

Thank you. And I, at this point introduce Ambassador
Barshefsky.

AMBASSADOR BARSHEFSKY: Thank you. I thought I would
just take a minute and talk about what fast track is, and then talk a
little bit about the trade agenda and what we would intend to use
fast track authority for. And then I'll introduce Gene Sperling.

The original fast track began in 1934 and gave the
President of the United States the ability to cut tariffs by his own
proclamation. The Constitution reserves to Congress the ability to
cut tariffs. In 1934, that authority was delegated to the President
of the United States by Congress under what we would now call fast
track authority. It was called something a little bit different
then. That authority has continued virtually without exception until
it expired in 1994 with the last grant of fast track authority.

So the President had the ability to proclaim reductions
in U.S. tariffs if a trade agreement was negotiated. But in the late
1960s it became apparent that nations began putting up non-tariff
barriers to compensate for their reductions in tariff and to try and
keep foreign goods out. So, in 1974, the partnership between the
Congress and the President with respect to trade agreements
negotiation was broadened, and the deal struck was this: Congress
would be able to consult with the President, direct the course of a
particular trade negotiation, agree on trade policy objectives. And
in exchange, when the President brought back a trade agreement,
Congress, in implementing legislation, would vote the agreement up or
down without amendment.

This gave the President the ability to negotiate from
strength because foreign countries understood once they negotiated
with the Executive Branch, Congress would not renegotiate individual
provisions of the agreement. But, at the same time, Congress would
be involved through consultation and other mechanisms in the goals
set out for the agreement and in the achievement of those goals.
That is the fast track authority, coupled with tariff cutting
authority, that has been in existence since 1974, and to which
President Clinton and Vice President Gore alluded.

That is precisely the authority sought here. We are not
seeking the approval of any particular trade agreement at this
juncture. We are simply seeking a reinstitution of the process by
which certain of these agreements can come back to the Congress for
an up or down vote. But let me emphasize a final vote on whether
implementing legislation passes to implement a trade agreement
resides with the Congress of the United States.

Let me talk a moment about the trade agendas. As the
President said, exports have been the driver of economic growth for
this country. We've seen in the last 10 years a tripling of our
export performance. We are the world's single largest exporter --
about 12 million jobs depend on exports. And we know that those jobs
tend to pay between 13 and 15 percent higher than non-trade related
jobs. The way one shifts the locus of job creation in this country
to higher-paying jobs, to better jobs, is through increasing it --
through, among other things, but increasing our export performance.

So as we look at the trade agenda ahead, we want to
capitalize on our current economic strength and our current
competitiveness, because, after all, we ought to be at our most
aggressive internationally now and not pull back. And we want to
also take a look at those sectors where we are highly competitive,
but where foreign trade barriers tend to be rather high.

There are three basic uses, therefore, to which we would
put fast track authority. The first has to do with the built-in
agenda from the Uruguay Round. You know at the end of the Uruguay
Round negotiations, which are the large, global trade talks, the
United States, among other countries, pushed for a timetable at which
negotiations in different areas would resume. We did that, as did
Europe and other countries because we wanted more out of the Uruguay
Round than we got.

This year, we begin again the negotiation on
intellectual property rights -- sorry, on government procurement;
next year, intellectual property rights; then agriculture; then
services. Government procurement is a trillion-dollar market for us
in Asia alone over the next decade; agriculture, a $600-billion
market globally; services, $1.2 trillion market. We want better
access into those global markets. We must have fast track authority
going into this group of talks or countries will not put meaningful
offers for market access on the table.

Second major use -- the President talked and the Vice
President talked about the information technology agreement, under
which we will reduce to zero tariffs on all of the kinds of
information technology products associated with the Information
Superhighway -- semiconductors, computers, telecommunications
equipment, faxes, phones, integrated circuits -- a huge array of
products in which we tend to be a global leader. Our tariff barriers
in those areas are zero or very low. Asia's averaged 30 percent.
We've agreed with another 43 countries that those tariffs should be
brought to zero across the board, all countries, by roughly the year
2000.

We already have agreement among our trading partners for an
ITA-2 -- that is to expand the scope of the products encompassed by
this extremely ambitious initiative. Fast track authority will be
used to implement that arrangement.

We're also in the process of looking at a number of
other individual sectors, again where we're very competitive but
global barriers tend to be high. For example, environmental
equipment and services, medical equipment and technology,
transportation equipment, a range of sectors as -- where fast track
authority will be needed.

The third area of the trade agenda is the area of more
comprehensive market access agreements with individual countries,
free trade agreements. The country that has been identified by the
administration thus far is Chile. Chile has already indicated that
they will sign on to labor and environmental agreements, subject to
fines for enforcement. They just completed a bilateral trade
agreement with Canada in which Chile signed on to labor and
environmental agreements. They will do the same with the United
States.

As to any other individual country we may wish to
negotiate with, we would obviously have to identify that country and
then undertake rigorous consultations with Congress before we
embarked on any additional negotiation.

Those are the uses of fast track authority. As the
President said, it is vital, absolutely vital, that we continue to
lead, that we continue -- continue to focus on our export performance
and to ensure that this country gets its fair share of global trade.

With that, let me introduce Gene Sperling.

MR. SPERLING: I'll tell you what. Probably, since
everybody is a little pressed, why don't Secretary Daley and Dan,
Charlene, why don't we just take Q&A now, and I think anything -- I
could say I can fit into some Q&A somewhere.

Q Question for Secretary Daley. Just before the
President and the Vice President were announcing their support for
this fast track authority, representatives of the major labor unions
were across the street, protesting all of this, saying it's a
betrayal, and that they are going to do everything they possibly can
to fight this fast track legislative authority. How do you feel
about going head to head with such close political allies as the
American labor movement who sees this as a betrayal?

SECRETARY DALEY: Well, obviously, the President feels
very strongly about many issues and is in agreement with the labor
movement on so many issues, and he is in agreement, as he stated
today, with the fact that labor issues are important not only in this
country and to this administration, which has proven it time and time
again over the last four and a half years, but in many world forums.
So it is obviously uncomfortable to not be in agreement with some of
your allies and strong friends, but there will be plenty of
opportunities as we move forward to be back together in unison on so
many issues.

Q Well, if you think that this case is so clear-cut,
why do you think it's become such a hot button issue for labor
leaders?

SECRETARY DALEY: Well, trade issues have always been
hot button issues for organized labor, and that's a position that
labor has had for many, many years.

Q Is there a way to finesse this situation such that
you can include some sort of protection for workers in the fast track
legislation itself? Or would that muddy the waters to the point that
it's unusable?

MR. SPERLING: I think the President -- first of all,
obviously, open markets has been, as the President said today, one of
his three pillars of his economic strategy, so that's something he
believes in. He believes it increases innovation, competition,
higher-wage jobs and that's been the strategy. When we do confront
opening markets, we do so with the goal of lowering tariffs and
non-trade barriers because, as Charlene said, that almost always
advantages us as the most competitive country in the world.

But we also aim as part of our goal to increase labor
standards and the environment. And one of the points that we've --
as we've gone through consultations and we've talked, is that there
are several ways to promote this agenda. One issue would be what you
can do within the trade agreement. The second issue is what you
could do through side agreements under executive authority. A third
area is things in the international labor core -- issues, things that
have been worked on that Charlene has fought hard for and had
unprecedented victories in over the last three years. There's also
initiatives like the sweatshop initiative that we have. And then
there are a variety of things, people we've spoken to who have talked
about what can be done domestically in terms of improving or training
or adjustment programs.

So the President is firm that anything he does will
further opening markets, environment and labor. There are different
ways to go about that, but the overall thrust of anything he does in
opening markets will further all three of these objectives.

Q You don't see it, then, for the specific question
of whether fast track legislation would be written in such a way to
include, mention, provide for the concerns of the workers in the
environment? You don't see that happening in the fast track
legislation itself?

MR. SPERLING: Well, we're going to put out our
legislation next week. I mean, I think we're not going to -- you
know, I said, we've had consultations with people. We want to have a
chance among ourselves to talk about what's been said. Obviously,
anything we put forward has to be capable of carrying a strong
bipartisan support and we have to look at how we best promote our
aims and how we best deal with political reality in getting a
bipartisan majority.

Q You were in charge of NAFTA. You became the czar
of NAFTA. You joined the administration to fight for NAFTA. It was
a very tough and uphill fight. How do you compare the time, then,
with this fight to get fast track?

SECRETARY DALEY: Well, in some ways we are obviously in
a much stronger position when you look at the economy. when you look
at the success that this administration has had. In 1993, you had a
very difficult budget battle in the summer, very difficult to win for
the President, where he laid out his economic strategy. And then to
come back in the fall with a NAFTA battle was very difficult.
Obviously, right now, as the President has stated, this economy is
extremely strong.

Politically, you have many of the similarities. You
have the same sort of split politically in both parties, and you do
have a different make-up, obviously, from a leadership perspective on
the Hill. And the make up of both caucuses are a little different
than they were in 1993. But there are probably more similarities.
It's very difficult, as it was in 1993, but I do believe we will be
successful this year, as the President was in 1993.

Q You spend a lot of discussion with the phrase
"trade related" measures in labor and environment. This was wording
that I think -- first put out in 1995, when you were first trying to
get fast track through, and it's come back in Mr. Archer's lingo in
the past few days. Can somebody define what "trade related" measures
for environment and labor mean?

MR. SPERLING: I mean, I think there are those of us here who
could. Will we right now? Do you want to?

AMBASSADOR BARSHEFSKY: The only thing that I would say
is that if you look at trade agreements over time you see that they
are much broader in scope than they were previously, and that they
encompass concepts that might not have been encompassed even 10 or 15
years ago. The Uruguay Round, for example, calls for the
establishment of a committee on trade and the environment. That
would have been almost unthinkable even 10 years ago. It calls for a
review of the intersection between labor and worker rights issues and
trade. Again, that's something that might have been unthinkable even
five years ago.

So we see a progression as you look at trade agreements
over time where issues with respect to the intersection of trade and
labor, or trade and the environment have been broached. I think that
obviously provides us some guidance.

I think the key is -- and I'd like to make a comment on
Gene's answer before -- I know the temptation is very much to look at
a piece of legislation and to try and parse it through as though the
end goal were the legislation. The end goal for the administration
is can the President keep our exports rolling out the door -- make it
here, sell it there. Can he at the same time promote and expand
labor principles, particularly labor rights, as they are viewed --
core labor standards. Can he help promote and ensure sustainable and
responsible environmental development. Those are the goals.

There is no legislation we would put forward under which
he could not pursue vigorously each of those goals. Let's keep our
eye on the ball. The key, the critical element here is the ability
of the United States to move forward on all three fronts
simultaneously.

Q What is the rationale for not including specific
protections for labor and the environment inside the core agreement?
What's the rationale for not doing it? Why do you have to put it as
a side agreement?

AMBASSADOR BARSHEFSKY: We're not commenting now on what
we're putting in the agreement or what we're not putting in the
agreement. All I'm suggesting is the matrix looks something like
this: There are three goals. Gene has laid out three or four or
five means of achieving or enhancing those goals -- the means being
what's in the bill, what are supplemental agreements, what do you
do in international fora, and under that heading, multilateral fora,
and what do we do regionally in the FTAA, in APEC, what do we do in
the OECD, what do we do in the ILO, what do we in UNCTAD. Then
individual initiatives that the administration and our business
community and labor unions work on, like the sweatshop initiative.
So there are a variety of means to pursue the aims that are so
important to the President and so important to the country, and
that's the critical aspect here.

Q How can you sell open trade, free trade at a time
with rising trade deficits, particularly with China and Japan? And
Japan -- there are so many problems between the United States on the
trade front, especially with a much-touted 1995 agreement on car
trade -- how are you going to do that at this time when there seems
to be so many troubles on that front?

AMBASSADOR BARSHEFSKY: We know that trade deficits are
the function of many things, principally macroeconomic and not
principally trade policy related, to the extent -- and we have always
said this -- to the extent portions of trade deficits are
attributable to trade barriers. We need to identify those barriers
and to bring them down.

In the case of Japan we have concluded 30 market opening
agreements. Exports under those agreements are about triple the rate
of our export growth to Japan overall. With respect to autos, there
are two issues. One is vehicles, one is auto parts. Our auto parts
trade is actually looking fairly strong. It's on the vehicle side
where a combination of factors, including a shift in exchange rates,
has dampened somewhat our exports to Japan and has increased Japanese
exports to the United States.

We will have a review of the auto agreement with Japan
in early October, looking particularly for Japan to continue the
process of deregulation in its own economy that will provide us more
benefits. But the key here -- again, let's keep our eye on the ball
-- the key here is our export performance, our export performance.
That's what shifts the locus of job creation to higher-paying jobs.
That is what provides tremendous opportunity for our workers at high
wages. And our export performance has been unparalleled.

Q If you have been able to reach those agreements
without fast track, why do you need fast track to -- basically,
you've been very successful without fast track up to now.

AMBASSADOR BARSHEFSKY: Agreements -- the President, as
you know, has executive authority, constitutional authority to
negotiate with foreign parties. And most of the agreements that we
have done have been agreements that break down foreign barriers in a
particular sector, not requiring the United States to take any action
on its own. But in the case of three agreements in particular, and
then the agreements that I've already outlined, the United States
would have to take legislative action. The three agreements we did
conclude where fast track was necessary were the conclusion of the
Uruguay Round, the NAFTA, and the information technology agreement.
And fast track was necessary because we were reducing tariffs and
because we were making additional U.S. law changes.

As we look at the future agenda, the entirety of the WTO
agenda will require further movement on tariffs, as well as some
movement on U.S. law changes, fast track would again be necessary.
Similarly on ITA-2 with respect to tariff reductions.

MR. SPERLING: I just want to add, just to make it a
little more specific -- without the fast track and Uruguay Round, the
pre-Uruguay tariff -- weighted tariff for Thailand was 41 percent.
Now it's 26 percent. So we're talking over the last four years
whether products made in the United States would be subject to that
much higher of a tariff. For Korea, 16.2 percent to 7.7; Singapore
16.2 percent before Uruguay, 1.3 percent now -- to the degree that
increased exports have been part of an economic strategy that has
helped strengthen this economy, and this is a period where we've had
a significant drop in unemployment, a historic job creation, so while
there are many challenges with change and many people, even in the
best of times, who struggle -- to the extent you've had a strong
economic strategy and exports have been part, to the degree that that
is obviously helped by having lower tariffs, those would not exist.
All of the differences mentioned here would not exist but for the
fast track authority there. So you can look forward, but you can
also look back at the lower tariffs our exports have faced that would
not exist today were it not for the President having fast track
authority.

Q Why don't we have a bill yet? What's the hold-up?

MR. SPERLING: There's nothing complicated here. After
the budget, which I think was signed on August 5th, we -- and then
the line item veto I think was taken care of around the middle of
August -- we started doing consultations on the Hill. As we did
them, as we talked to people, it was very clear to us that it would
be more helpful in getting bipartisan support, more helpful in
creating a tone and an atmosphere of inclusiveness if we took a few
more days to consult and to hear more people out.

I can tell you firsthand there is a fundamental difference
between going to a meeting in which you say, we've already
made every decision and we're just here to tell you what we're going
to do, and a meeting where you come and say, we've held up things a
bit because we want to get your input before we make final decisions.
And everything you learn working in the White House and dealing with
Congress is that you err on the side of inclusiveness and
consultation and I will tell you, on any bill, on any piece of
legislation, at any time, if there's a choice between meeting a
self-imposed or press-imposed deadline on a particular bill and doing
the necessary consultation that allows you to include more people's
thoughts and ideas and get more support, I'll choose the latter every
time.

Q When will there be --

MR. SPERLING: I think most of the consultations that we
wanted to have and consider, we have or have scheduled, so I think
we're certainly aiming for next week.

Q Gene, how likely is it that the legislation is going to
change between now and then? Is the President eager to try to make
fine-tuning changes that would appeal to Democrats, to labor
environment?

MR. SPERLING: Again, you'll see the legislation when we
put it out next week.